Correlation Between Dometic Group and Image Systems
Can any of the company-specific risk be diversified away by investing in both Dometic Group and Image Systems at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dometic Group and Image Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dometic Group AB and Image Systems AB, you can compare the effects of market volatilities on Dometic Group and Image Systems and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dometic Group with a short position of Image Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dometic Group and Image Systems.
Diversification Opportunities for Dometic Group and Image Systems
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dometic and Image is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dometic Group AB and Image Systems AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Image Systems AB and Dometic Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dometic Group AB are associated (or correlated) with Image Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Image Systems AB has no effect on the direction of Dometic Group i.e., Dometic Group and Image Systems go up and down completely randomly.
Pair Corralation between Dometic Group and Image Systems
Assuming the 90 days trading horizon Dometic Group AB is expected to under-perform the Image Systems. But the stock apears to be less risky and, when comparing its historical volatility, Dometic Group AB is 1.64 times less risky than Image Systems. The stock trades about -0.02 of its potential returns per unit of risk. The Image Systems AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Image Systems AB on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Image Systems AB or generate 19.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Dometic Group AB vs. Image Systems AB
Performance |
| Timeline |
| Dometic Group AB |
| Image Systems AB |
Dometic Group and Image Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dometic Group and Image Systems
The main advantage of trading using opposite Dometic Group and Image Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dometic Group position performs unexpectedly, Image Systems can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Image Systems will offset losses from the drop in Image Systems' long position.| Dometic Group vs. Thule Group AB | Dometic Group vs. Husqvarna AB | Dometic Group vs. Trelleborg AB | Dometic Group vs. Essity AB |
| Image Systems vs. Precise Biometrics AB | Image Systems vs. Anoto Group AB | Image Systems vs. Bong AB | Image Systems vs. Episurf Medical AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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